Mintz Levin Energy Technology

Energy Technology Connections Newsletter

Your Law Firm Link to Industry News

May 2016

A Note from the Editors

Our May edition of Energy Technology Connections brings you recent industry highlights and a list of upcoming energy industry events. In Leaders in the News, we profile our friends at enVerid Systems and highlight their success in solving a major cause of HVAC energy waste. Our Innovator Profile highlights the top five takeaways from the World Energy Innovation Forum held at the Tesla Motors manufacturing facility earlier this month. The Forum is chaired by our good friend Ira Ehrenpreis, Founder and Managing Partner of DBL Partners. For event highlights, we feature a free start-up fundraising workshop presented by SmartMoney Startups and PersonalVC along with the NEWIEE Women Shaping the Agenda Series. Finally, our Washington Update has the latest on the recently approved Energy Policy Modernization Act (S. 2012) and the Ozone Standards Implementation Act (H.R. 4775), as well as the latest activities from the IRS regarding the Production Tax Credit, the Environmental Protection Agency, and the Obama administration.

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Contents

Leaders in the News: enVerid Systems

This month, we are featuring our client enVerid Systems, a leading developer of HVAC technologies intent on improving energy efficiency and air quality in existing buildings and in new construction. One of the leading causes of energy waste in buildings associated with HVAC systems is the constant need to replace indoor air with outside air, and enVerid has developed a revolutionary solution that delivers substantial energy savings. The company’s HVAC Load Reduction (HLR) technology minimizes the amount of outside air used to maintain indoor air quality, leading to dramatic reductions in energy costs.

enVerid’s HLR module is a “smart scrubber” that cleans the indoor air through the use of patented reusable sorbents that capture and retain unwanted indoor air contaminants while allowing clean air to flow back into the building. By cleaning the indoor air, the HLR module minimizes the amount of outdoor air required to maintain indoor air quality (IAQ), thereby reducing the load on the HVAC system and reducing both cooling and heating energy consumption by 20%–40%. enVerid’s HLR module allows flexible, side-by-side retrofitting with existing HVAC infrastructure and offers a scalable solution for any building, including office buildings, stores, schools, hotels, and airports.

2016 has already been a momentous year for enVerid. In January, the company was named one of 53 start-ups expected to boom in 2016, according to a handful of Silicon Valley’s top venture capitalists, as its HLR solution “Cleans the air, saves huge energy, makes big bucks…the poster-boy company for the post-Paris climate-change conference.” In February, enVerid announced the formation of a partnership with New Delhi–based BreatheEasy to bring its HLR system to India. And earlier this month, enVerid announced the launch of the HLR 1000E, a new HLR model that extends to buildings in all geographies and for all seasons. The HLR Series E integrates a “closed loop regeneration” technology that enables the system to operate in both warm and cold climates while minimizing its energy requirements.

enVerid has made great strides and built strong relationships with many leading national labs over the last few years. We congratulate our friends at enVerid on their progress and look forward to more exciting developments in the future.

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Innovator Profile: Top Takeaways from the World Energy Innovation Forum

Our innovator profile this month recaps the top takeaways from the World Energy Innovation Forum, which Mintz Levin was proud to be a part of earlier this month. The Forum is hosted at the Tesla Motors HQ and chaired by our good friend, Ira Ehrenpreis, Founder and Managing Partner of DBL Partners. The Forum brought together the “who’s who” of the energy innovation sector, including leading investors, Fortune 500 executives, technologists, policymakers, and entrepreneurs for two days of high-level presentations, conversations, and networking. The event also featured many key leaders in the energy innovation sector, all of whom took to the podium to address pivotal energy issues and opportunities of our time, including, among other guest speakers:

Elon Musk, CEO of Tesla Motors, SpaceX
Steven Chu, 12th United States Secretary of Energy
George Shultz, Former US Secretary of State
Beth Comstock, Vice Chair, GE
Ray Mabus, Secretary of the Navy
Tony Fadell, Founder and CEO, Nest; SVP, Google
Andrés Gluski, President and CEO, AES
Xavier Helgesen, Co-founder and CEO, Off Grid Electric
Susan Kennedy, Founder and CEO, Advanced Microgrid Solutions
Nancy Pfund, Managing Partner, DBL Partners
Ellen Williams, Director of Advanced Research Projects Agency, ARPA-E

Our own Sahir Surmeli, Jeremy Glaser, Nada Shamonki and Norbert Ngethe were in attendance and put together Mintz Levin’s Top Takeaways from the World Energy Innovation Forum:

Opportunities for distribution in peri-urban and rural Africa are getting venture investment. According to the Renewables in Developing World panel, 1.2 billion people on earth don’t have electricity. Organizations such as Akon Lighting Africa, Off Grid Electric, and Power for All are making it their mission to change this by utilizing innovative energy technologies.
The next decade will bring about big changes for renewables and robotics. “50% of all cars will have autonomous driving in 10 years,” said Elon Musk. “Machine intelligence is on track to vastly exceed human intelligence – exponentially.” He also noted that the fundamental issue with fossil fuels is that every fossil fuel powered vehicle on the road is subsidized.
Start-ups are being nurtured. According to the Corporate Investing presentation, corporations are jumping head first into the start-up world. Corporate venture funds mentioned such as GM Ventures, GE Ventures, Shell Technology Ventures, e-on, Constellation, EDF, and RWE act as investors and partners. The start-up benefits from office/lab space, mentoring, technical expertise, and other strategic expertise under the corporate umbrella. The investors benefit from technical and commercial collaboration and the potential of discovering technologies that help solve business problems for their customers.
Green technology and increased energy efficiency are still alive, despite the significant drop in oil and gas costs.
Keep innovating. We will leave you with an inspirational quote that was shared at the Forum: “All human development, no matter what form it takes, must be outside the rules; otherwise we would never have anything new.” – Charles Kettering

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Event Highlights

SmartMoney Startups & PersonalVC Present: How To Accelerate Fundraising For Your Startup

Join David Chang, Co-founder of PersonalVC, and Jeff (J.D.) Davids, who has served on the management teams of 8 start-ups with 3 IPOs and 3 acquisitions, on June 1 at 6 pm at WeWork Fort Point for a free fundraising workshop. The primary focus of this workshop is to show entrepreneurs where to find the right investors for their start-up. In this workshop you will learn:

How to accelerate your start-up fundraising
Why you are wasting valuable time pitching investors that don’t understand your business
5 ways to identify SmartMoney investors that bring more than just cash to your deal

For more information and to register, click here.

NEWIEE Women Shaping the Agenda Series

Mintz Levin is proud to sponsor the New England Women in Energy and the Environment’s (NEWIEE’s) second annual Women Shaping the Agenda Panel, The Business of Getting to Clean Energy & Environment, on July 12 at The Fletcher School at Tufts University. The panel, moderated by Professor Barbara Kates-Garnick, will feature Maryrose Sylvester, President and CEO of Current, powered by GE; Cynthia A. Arcate, President and CEO of PowerOptions; and Cheryl A. Warren, National Grid USA Board Director and Innovation Strategist. Stay tuned for more details in our June newsletter!

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Washington Update

After several delayed starts, the Senate bipartisan energy bill, the Energy Policy Modernization Act (S. 2012), was approved by the Senate on April 20. The House passed its energy bill, the North American Energy Security and Infrastructure Act (H.R. 8), last December. There are numerous differences between the two measures that will need to be reconciled before final passage. The White House has threatened a veto of H.R. 8, while expressing appreciation for the bipartisan support for the key energy and conservation priorities in S. 2012.

The Fiscal Year 2017 appropriations process is under way, with several of the 12 annual spending bills having been approved at the committee level. The House and Senate Appropriations Committees each approved their FY 17 Energy and Water Development bills last month. In the Senate, floor consideration began last month and the spending bill was approved on May 12.

On May 18 the House Energy and Commerce Committee approved two bills: the Ozone Standards Implementation Act (H.R. 4775), which would delay from 2015 to 2024 the Environmental Protection Agency’s ozone standard, as well as extend from five years to ten years the required review of the standard; and the Advanced Nuclear Technology Development Act (H.R. 4979), which would support civilian research and development of advanced nuclear energy technology.

In response to the exclusion of non-solar technologies from the Section 48 Investment Tax Credit (ITC) extension that was approved last December, Rep. Patrick Meehan (R-PA) and Rep. John Carney (D-DE) have introduced legislation (H.R. 5172) which would restore parity for the non-solar Section 48 ITC technologies including fuel cells, microturbines, combined heat and power systems, small wind, and thermal energy. The bill is cosponsored by Rep. Tom Reed (R-NY). With the ITC for these technologies set to expire on December 31, 2016, the bill extends the tax credit for these technologies with a commence construction date of December 31, 2021. In the case of fuel cell and small wind properties, the bill includes a phase-out timeline.

The Internal Revenue Service on May 5 extended the commence construction period for the Production Tax Credit (PTC) from two to four years. The IRS action covers wind, biomass, geothermal, and hydropower. The agency is expected to issue a separate guidance for solar projects. The wind PTC approved by Congress last December reduces the tax benefit over a period of five years, but the new IRS guidance will allow developers to secure a higher incentive if they begin work earlier.

The Environmental Protection Agency has issued the first-ever regulations aimed at directly limiting the emissions of methane. The regulations, released under the Clean Air Act, cover both new and existing sources in the oil and gas sector. A final rule has been issued for new, modified, and reconstructed sources. For existing sources the agency is seeking public comment through an Information Collection Request (ICR) whereby companies provide the information necessary for the agency to reduce methane emissions from existing oil and gas sources.

Secretary of State Kerry traveled to New York last month for the Opening Ceremony of the United Nations Signing Ceremony of the Paris Agreement on Climate Change. In his remarks, Secretary Kerry stated that “The power of this agreement is the opportunity that it creates. The power is the message that it sends to the marketplace. It is the unmistakable signal that innovation, entrepreneurial activity, the allocation of capital, the decisions that governments make, all of this is what we now know definitively is what is going to define the new energy future—a future that is already being defined but even yet to be discovered. The power of this agreement is what it is going to do to unleash the private sector, and it is already doing to set in pace the global economy on a new path for smart, responsible, sustainable development.” One hundred and seventy-five nations signed the agreement on April 22, which was also Earth Day, and so far it has been ratified by the governments of Barbados, Belize, Fiji, Grenada, Maldives, Marshall Islands, Mauritius, Nauru, Palau, Samoa, Seychelles, Somalia, St. Kitts and Nevis, St. Lucia, the State of Palestine, and Tuvalu. The agreement is open for additional signatures through April 21, 2017. President Obama does not intend to submit the Paris Agreement to the Senate for approval, taking the position that it is not a treaty and does not require congressional approval, although the GOP does not share this view.

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